The Apprenticeship Levy is an opportunity not to be missed.
So says leading professional services firm Grant Thornton, which is increasing its recruitment of apprentices from 300 today, to 800 (of a workforce of 4500) by the end of 2019.
“It’s a business no brainer,” says Head of Trainee Experience and Apprenticeships Caroline Bedford. Not only do those businesses with a payroll of over £3m, which pay the levy, have the opportunity to draw down their levy payments to fund apprenticeships, but they’re also exempt from paying employer national insurance for apprentices under the age of 25. You can bet that an accountancy firm has done its sums, and the case has been made.
It also makes sense for employees. Grant Thornton’s school leavers who follow an apprenticeship track achieve a professional qualification faster, and with less debt, than those following a university track.
So why is the apprenticeship levy getting such bad press? If you took your cues from the media, you’d think the policy was a burden on business and disaster for apprentices.
It’s true that the policy hasn’t been universally welcomed, and that we’ve seen a decline in apprenticeship starts since the levy came in to force in April 2017. But it’s early days, and the positive stories are struggling to make the headlines.
Step in our charity partner City Gateway. City Gateway provides education, training and support to young people from disadvantaged backgrounds in London to enable them to access apprenticeships and jobs. In advance of Apprenticeship Week, they brought together a group of levy paying employers, including J.P. Morgan, DLA Piper, PWC, the John Lewis Partnership and EY, to discuss apprenticeships and social mobility.
The employers were very candid when discussing the challenges. There can be tension between using the levy to fund training for existing employees, versus using it to create new opportunities for young people to come in to their firms. It can be difficult for social mobility and CSR teams to sell the idea of hiring apprentices to the rest of the business.
But for those employers who have stepped up their apprenticeships offer, initial signs are positive. Some are taking courageous steps like flexing the entry requirements for apprentices; the employer equivalent of ‘contextualised admissions’ which are designed to enable more disadvantaged young people to access university. Some universities make an assessment of an applicant’s potential to succeed based on a number of contextual factors, like socio-economic background and the type of school the applicant went to, when making offers.
Our charities are always telling us how important context is. A young person from a middle-class household, with high parental engagement, who goes to a good school and may even have private tuition as well may get all As, but they’ve had a lot of support to do so. A young person from a poorer household, who doesn’t get a lot of help with homework, whose school is not rated good or outstanding, who doesn’t have access to outside support, may achieve lower grades but may have had to show more initiative, tenacity and determination to pass their exams. Just the qualities employers are looking for in fact.
Interestingly, one of the employers present at City Gateway’s event reported that they are finding that there is no correlation between the prior attainment of their apprentices, and how well those young people do on the job. So lowering the entry requirements potentially carries little risk, while enabling more disadvantaged young people, who do less well at school, to access high quality apprenticeships. It’s a win win.
As for the initial decline in apprenticeship starts, there are probably good reasons for this. One is that employers are waiting for the Institute of Apprenticeships to sign off some of the new apprenticeship standards before they can recruit apprentices, and the Institute was delayed in starting its work. The other is that employers have two years to draw down their levy payments and so are taking their time to plan how best to do so.
So no cause for alarm, necessarily. It’s worth remembering that the policy is barely a year old. But we need better data and more of it to understand the true impact. We need to know how many young people from disadvantaged backgrounds are accessing apprenticeships, completing them, and progressing to higher level apprenticeships and jobs.
With the help of charities like City Gateway, and employers like Grant Thornton, apprenticeships can offer all young people fulfilling opportunities for on-the-job learning and progression. They are invaluable, so let’s start valuing them.